MC EXCLUSIVE Need to revive rule-based global trade system, UK and India should lead it: Karan Bilimoria

Karan Bilimoria (Image courtesy: @orfonline/X)

There is a need to revive the rule-based global trade system, and I feel India-UK should be leading that, Karan Bilimoria, Chairman of International Chamber of Commerce, UK and Member of the House of Lords said on Friday.

"There is so much India and UK can do together. USA’s share in the world trade today is 13 percent, and the rest of world’s (share) is 87 percent," Bilimoria told Moneycontrol in an exclusive interview.

"We should revive the World Trade Organisation (WTO). The WTO has basically been ineffective," he said on the sidelines of Kautilya Economic Conclave 2025.

Bilimoria noted that the high tariffs imposed by US are not gonna benefit anybody. "It's not going to benefit any country, including America too, because in the long run what will happen when you impose high tariffs, you're making products more expensive for your own consumers."

Effective from April 2025, a 10 percent baseline tariff applies to most UK goods imported into the US. While for India, the tariff rate, effective from August-end, is 50 percent.

Bilimoria said the India-UK free trade agreement (FTA) is going give a fillip to bilateral trade, and within the next five years, the trade’s value would double. At present, the bilateral trade between India and UK stands around $56 billion.

Bilimoria said that education and defence are the two key sectors which can benefit from the FTA.

"When it comes to defence, the UK has one of the most advanced defence industries in the world, whether it's nuclear submarines that we have, or whether it's ships or aircrafts."

"In every area of defence, we've got great technology…and India can benefit in partnering with the UK, because India wants to have more and more defence manufactured in India. And this is where we can partner," said Bilimoria, adding that India is no longer looked upon as an outsourcing destination.

“India is looked upon as a partnering country, where you partner in research and development and innovation. And that's the capability. Because I always say that India has the cleverest people in the world,” he said.

The House of Lords' Member noted that the decision of India to open up British Universities campuses will benefit both the countries. "India needs the capacity of world-class universities to come and open up here, and Britain has the best universities in the world…it's a very strong position that India can benefit from and the UK can benefit from."

On the United Nations, Bilimoria said that India should now become a permanent member of the Security Council. "India is the most populous country in the world, the fourth-largest economy in the world, and is not a member of the P5…How is that fair?"